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DirecTV, Inc. v. Cruz

November 21, 2006

DIRECTV, INC.,
v.
JUAN CRUZ, DEFENDANT.



The opinion of the court was delivered by: Howard G. Munson Senior United States District Judge

MEMORANDUM - DECISION AND ORDER

Plaintiff, Directv, Inc. ("DIRECTV"), a satellite television provider, filed a complaint against defendant Juan Cruz ("Cruz") pursuant to the Federal Communication Act of 1934, 47 U.S.C. § 605, and the Federal Wiretap Laws, 18 U.S.C. § 2510 et seq. DIRECTV generally alleges that Cruz purchased pirate access devices ("PADs") and used them to intercept DIRECTV satellite television broadcasts without authorization by or payment to DIRECTV. See Dkt. No. 1, Compl. at ¶¶ 3, 4. Currently before the Court is DIRECTV's motion for default judgment against Cruz pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure.

BACKGROUND

On May 25, 2001, DIRECTV, with the assistance of local law enforcement, executed several writs of seizure upon a mail shipping facility used by several sources of pirate technology including Vector Technologies and DSS-Stuff. Dkt. No. 1, Compl. at ¶ 3. As a result of these seizures, DIRECTV obtained possession of sales and shipping records, email communications, credit card receipts and other assorted records that documented Cruz's purchase of "illegally modified DIRECTV Access Cards" and PADs. Id. DIRECTV's complaint alleges that on March 23, 2001, Cruz purchased one or more PADs consisting of a printed circuit board device called a bootloader from DSS-Stuff. See id. at ¶ 9. DIRECTV further alleges that Cruz used his PADs to surreptitiously decrypt and view DIRECTV's satellite television transmissions and thus intentionally and improperly received and/or assisted others in receiving DIRECTV's satellite transmissions of television programming without authorization. See id. at ¶¶ 20, 24 and 28. The Clerk of the Court entered default judgment against Cruz on October 11, 2006, and the instant motion followed. See Dkt. Nos. 56 and 57. DIRECTV seeks judgment in the amount of $10,000 pursuant to 18 U.S.C. § 2520(c)(2)(B) and 47 U.S.C. § 605(e)(3)(C)(i)(II) plus attorneys' fees and costs pursuant to 18 U.S.C. § 2520(b)(3) and 47 U.S.C. § 605(e)(3)(B)(III). See Dkt. No. 57, Jones Decl. at ¶ 6.

DISCUSSION

I. Legal Standard: Default Judgment

"While a party's default is deemed to constitute a concession of all well pleaded allegations of liability, it is not considered an admission of damages." Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992); Time Warner Cable of New York City v. Browne, 2005 WL 567015, at *1 (S.D.N.Y. May 10, 2000) ("It is well established that a defendant who fails to appear or otherwise defend against a Complaint admits every 'well plead allegation' of the complaint.") (citing Trans World Airlines, Inc. v. Hughes, 449 F.2d 51, 63 (2d Cir. 1971)). Rule 55 of the Federal Rules of Civil Procedure provides a two-step process for obtaining a default judgment. First a plaintiff must obtain a default. When a party against whom affirmative relief is sought has failed to plead or otherwise defend, a plaintiff may notify the court of such, and Rule 55(a) empowers the clerk of the court to enter a default against a party that has not appeared or defended. Second, having obtained a default, a plaintiff must next seek a judgment by default under Rule 55(b). Rule 55(b)(1) allows the clerk to enter a default judgment if the plaintiff's claim is for a sum certain and the defendant has failed to appear and is not an infant or incompetent person. See FED.R.CIV.P. 55(b)(1). "In all other cases," Rule 55(b)(2) governs, and it requires a party seeking a judgment by default to apply to the court for entry of a default judgment. See New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005); see generally FED.R.CIV.P. 55.

II. Liability

The Federal Communication Act provides that "[n]o person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication by radio and use such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto." 47 U.S.C. § 605(a). The Second Circuit has held that 47 U.S.C. § 605 applies "in cases involving the sale of descrambling devices as long as the head end of the cable system at issue receives at least some radio transmissions." Community Television Systems, Inc. v. Caruso, 284 F.3d 430, 435 (2d Cir. 2002). Similarly, 18 U.S.C. § 2511(1)(a) provides that any person who "intentionally intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication . . . shall be subject to suit . . . ."

By failing to appear in this action, Cruz admits to the following conduct: (1) interception of DIRECTV's satellite transmission without prior authorization or payment; (2) knowingly distributing modified signal theft devices for the unauthorized decryption of DIRECTV's satellite transmissions; (3) procuring other persons to intercept or endeavor to intercept DIRECTV's satellite transmission of television programming; and, (4) mailing or transporting these PADs through interstate commerce. See Dkt. No. 1, Compl. at ¶¶ 20, 24 and 28. Accordingly, DIRECTV is entitled to a default judgment against Cruz for violating the Federal Communication Act of 1934, 47 U.S.C. § 605(a) and the Federal Wiretap Law, 18 U.S.C. 2511(1)(a).

III. Statutory Damages

Both the Communications Act and the Federal Wiretap law authorize statutory damages for violations of their provisions. See 47 U.S.C. § 605(e)(3)(C)(i)(II); 18 U.S.C. § 2520(c)(2)(B). Statutory damages under 18 U.S.C. 2520(c)(2)(B)*fn1 are discretionary. See Schmidt v. Devino, 206 F.Supp.2d 301, 306 (D.Conn. 2001). The Court's discretion, however, is limited to either "awarding the full amount of statutory damages or no damages at all." Goodspeed v. Harman, 39 F.Supp.2d 787, 791 n. 6 (N.D.Tex. 1999).

Under 47 U.S.C. § 605(e)(3)(i)(II), aggrieved parties are entitled to statutory damages "in a sum of not less than $1,000 or more than $10,000, as the court considers just . . .." The Second Circuit has typically interpreted a violation as using one PAD. See e.g., Int'l Cablevision, Inc. v. Sykes, 997 F.2d 998, 1007 (2d Cir. 1993).

Here, DIRECTV alleges that Cruz purchased one or more PADs. DIRECTV seeks a default judgment for statutory damages in the amount of $10,000. DIRECTV also argues that the statutory damages are proper because its actual damages cannot be calculated due to Cruz's failure to file an answer and provide discovery. It is undisputed that Cruz has neither appeared before nor provided the court with any reasonable ...


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